Australia / Israel Review

Tzvi Fleischer

Time to rethink Fayyadism?

Palestinian Authority (PA) Prime Minister Salam Fayyad is widely seen as a breath of fresh air compared to most other Palestinian political leaders, at least in the West. The former International Monetary Fund economist is widely credited with re-focusing the PA on building the infrastructure of statehood and a Palestinian economy, and away from corruption and militarism. He is seen as responsible for the clearly improved economic situation in the West Bank in recent years, including growth estimated at 8% in 2010 and 7.2% in 2009 according to the World Bank.

However a new study by two Israeli experts, economic analyst Eyal Ofer and financial consultant Adam Roiter, suggests that these numbers do not represent real economic achievement. Instead, they say, it is almost wholly the result of a large growth in financial aid. According to the study as reported in the Israeli press, fully 60% of the GNP of the Palestinian Authority comes from financial aid from the US, EU, World Bank and other sources. Moreover, Ofer and Roiter say this aid has been growing rapidly and accounting for more and more of PA GNP. According to their report, aid increased 20% over the past year and has more than doubled, in real terms, since 2006. In 2000, they point out, aid accounted for only 10.47% of PA GNP.

Ofer and Roiter also suggest that the aid, the highest per capita in the world, is not being used to build a sustainable economy. Roiter told a newspaper that “The funds go into the pockets of bureaucratic echelons and to the monstrous administrative apparatus that mostly deals with allocation of funds and fundraising… Governmental services operate on the expense of the business sector, which is left at a standstill – instead of developing alongside it.” Ofer stated, “Employers lack the ability or the will to go into industry or development, because they cannot compete with the salaries of governmental organs and that of the aid workers on the ground… In reality, their economy is solely based on the trade of services.”

The study even casts doubts on one of the widely touted successes of Fayyad, his ability to raise more taxes directly from Palestinians. The study notes that in fact 77% of all taxes collected are collected by the Israeli Finance Ministry as part of a joint agreement between Israel and the PA. The US$1.4 billion transferred in this way annually represents one third of the PA budget.

Of course, this is only one study and may not be definitive. However, it is consistent with recent reports from the OECD, some news stories, and what some experts on the Palestinians have said privately.

It does not mean that Fayyad should not be supported. He remains almost certainly better than any alternative. But it does mean there should be some scepticism directed at Fayyad’s claims to be building the institutions of statehood. That is not true if those institutions are completely dependent on a huge, ongoing flow of foreign aid. A state will need to create a genuine domestic economy, able to stand on its own without so much aid.

It also means that maintaining and increasing aid flows will be a primary focus of PA foreign policy for the foreseeable future. Many of its decisions and positions regarding peace with Israel should probably be seen partly as products of this overwhelming need.

Conspiracy without Limits

As Bret Stephens notes in this edition (see pp. 25-26), conspiracy theories, especially about the evil power of Jews, are a severe affliction in the Middle East. Almost anything bad can be explained by pointing to the Zionists or the Jews. Stephens cites Egyptian statements following the violence against the Coptic minority there, but this is only one example of a widespread phenomenon. For another, Palestinian Media Watch (Jan. 12) noted that a senior PA official, the Director General of PA Chairman Mahmoud Abbas’ office, Abd al-Rahim, recently blamed a whole series of events in the Arab world on Israel. Among the events he blamed on Israel in the official PA newspaper al-Hayat al-Jadida (Jan. 4) were: “the ethnic-religious battle going on in Lebanon;” “the division of Sudan”; “what is happening in Yemen and the existence of the so-called Southern Movement, the Houthis, and al-Qaeda in Yemen;” “massacres being carried out against the Christian communities in Iraq” and “what some regional groups have done to Palestinians in Iraq”. He alleged all these events were being orchestrated to “cause a decrease [in attention] to the Palestinian cause and to turn it into a secondary matter with no priority” and Israel was acting “in accordance with a precise plan.”

In the view of this conspiracy theory and the many others we have previously documented, it seems worth asking, is there a conspiracy about Israel and the Jews that is too laughable, too far-fetched, to be taken as credible in the mainstream Arab media?

Unfortunately, a recent television interview in Egypt with a television producer named Wael Ramadhan suggests the answer is no. Ramadhan appeared on Egypt-TV (Nov.18) to discuss his new TV series about Cleopatra. Here’s what he had to say about it:

“The [Roman] war against Cleopatra was Jewish in essence, and history repeats itself. The Romans had no territorial aspirations in Egypt in those days, and this is ignored by history and by many historians… But the Jews harboured resentment and pain, because of their expulsion from Egypt – when they were still called ‘Hebrew’ – and they wanted to return to Egypt by force… So they recruited the help of the Romans… [The Jews] financed the Romans, distracted them from their wars, and diverted them to Egypt. They failed in their attempt to get Julius Caesar to defeat Cleopatra. They failed to get Mark Antony to defeat Cleopatra… They failed in their efforts to completely control that region. To this moment, they continue to try. History repeats itself.”

I challenge readers to come up with a more bizarrely obscure and laughable contemporary example of anti-Jewish conspiracy theories.

Dictator taken Aback

The sudden overthrow of the Ben Ali dictatorship in Tunisia clearly surprised many but no one seems to have been more taken aback, indeed gobsmacked than Muammar Gaddafi, the longstanding, frequently loopy dictator of neighbouring Libya. He denounced the revolution in no uncertain terms but what was particularly amusing was how genuinely surprised he seemed to be that anyone would want to overthrow a regime just because it was dictatorial and corrupt.

Speaking in a televised rant to the Tunisian people posted on YouTube, he said:

“You’re destroying and burning your country, at the expense of your sons’ lives so you could hand over the rule to another president. Is this the desired end result?

“Why don’t you leave the first president in place? He’s been at it for 23 years.

“Here are the reports, reports that say that Tunisia was in the best situation possible. There was no crisis worthy of demonstrations.

“If it’s a matter of corruption, whether of a particular family, group, or person, this is not something that merits the sacrifice of tens of lives.

“How could one die for such a thing as corruption?

“Just prosecute them!

“Hold a demonstration against them!

“Assemble in front of their house and ask your president to prosecute or isolate them.

“You burn down Tunisia, and have your sons killed just because someone is corrupt?”

Of course, there also has to be a conspiracy theory as well – this is the Middle East, and this is Gaddafi. Referring to WikiLeaks revelations of American diplomatic cables about Tunisia wich revealed corruption and helped stir public anger, Gaddafi went on to blame “lying ambassadors whose intention is to sow enmity and confusion among nations.”